KUALA LUMPUR – iProperty.com.my debuted its H1 2020 Property Demand Analytics on 30th September for the rental market which provides an overview of rental demand using iProperty.com.my’s user visits and property listings data for residential properties in Malaysia with a particular focus on Kuala Lumpur, Selangor, Penang and Johor.
The rental analytics, the first of its kind in Malaysia, takes a look at three property types: terrace houses, condominiums, and serviced residences. Due to the COVID-19 outbreak, the overall H1 2020 national rental demand declined by -5.6%.
The transition from the Movement Control Order (MCO) to the Conditional MCO (CMCO) followed by the Recovery MCO (RMCO) has allowed for a gradual economic and social recovery from mid-May onwards.
This observation is supported by the recovery in property interest during the CMCO phase when the government relaxed various mobility restrictions and property viewings were permitted again.
One month into the RMCO and by the end of the first week of July, there was an ¹upward recovery of +25% in rental visits on iProperty.com.my.
The market recovery towards the end of H1 2020 dampened the initial effects of the pandemic and contributed towards a lower overall decline of -5.6%. In H1 2020, lower-priced high-rise properties garnered a higher rental yield compared to landed properties.
Condominiums and serviced residences recorded rental yields of +4.17% and +4.03% respectively while terrace houses recorded a +3.43% yield. Conversely, condominiums were the most popular property type among rental property seekers within the four major capital cities of Kuala Lumpur, Selangor, Penang and Johor.
Due to the unprecedented situation caused by COVID-19, property seekers could be considering rental options instead. This could explain the increasing number of both visits and listings for Kuala Lumpur’s rental market compared to H1 2019, resulting in a more modest demand decline of -2.9% in the capital city.
Property seekers were especially interested in rental properties with asking rental prices ranging between RM1,500 to RM2,000 per month.
In Kuala Lumpur, among the areas with the best rental yield in H1 2020 were Pantai, Brickfields, Taman Tun Dr Ismail, and Wangsa Maju. Selangor’s rental demand figures experienced a similar marginal decline of -1.2%. This was due to the increasing number of listings surpassing the increase in visits. For H1 2020, Ulu Kelang was the fastest-growing area with an impressive +44.21% increase in year-on-year (YoY) demand growth.
Rental demand in Selangor has shifted to suburban areas such as Ulu Kelang, Bangi, Klang, Rawang and Semenyih due to their affordable prices. Within these areas, property seekers were mainly looking for high-rise residences with low-entry prices.
Although user visits and listings in Penang grew in H1 2020, the overall rental market demand in the northern state declined by -13.7%. This was due to the higher number of listings compared to the number of user visits. In addition, the MCO contributed to the decline in rental demand as the closure of both state and international borders has affected the short-term rental accommodation market in Penang.
Bukit Mertajam and Ayer Itam are popular rental options with local property seekers looking at rental options below RM1,000 per month.
In Bukit Mertajam, property seekers were looking for terrace houses and condominiums while in Ayer Itam many were looking for apartments and condominiums.
Johor’s rental demand dropped by -19.5% in H1 2020 due to the number of listings which outweighed the number of user visits. Nevertheless, the median asking rent for Johor (RM1,400 per month) was still lower compared to other major states in the country.
Iskandar Puteri recorded the fastest growing YoY demand at +35% because its rental listings were reduced by half, mainly for the condominium segment.
Many property seekers were looking for rental properties below RM2,500 per month in Iskandar Puteri. Johor’s most in-demand rental area, Pasir Gudang, garnered the highest rental yield in the state with terrace houses being the top rental option.
This industrial town recorded a rental yield of close to +7%, while its median rental price was at RM1,200 per month. “Due to the unfortunate circumstances caused by COVID-19, many Malaysians are more inclined to rent than buy.”